SERS Insights

My Deferred Compensation Learning Experience

February 22, 2021 | Mary Soderberg, SERS board member | Terms & Disclaimers

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In 1987, when I first started working for the Commonwealth of Pennsylvania, I was in my late thirties and had never had a pension plan. At the time, I wasn’t sure how long I would work in state government, but I knew having a pension and beginning to plan for retirement was important to my future.

Taking the Plunge

The legislation which authorized the Deferred Compensation Program had just recently been enacted when I began working for the General Assembly. My boss, State Representative Max Pievsky, was a big proponent of the new program. He encouraged everyone in the office to sign up. It was obvious to me that I should be doing something more for my retirement, but I honestly don’t think I would have signed up for Deferred Compensation, if Max had not encouraged me. I was newly married, buying a house, paying off graduate school and I really didn’t have much extra at the end of the month. I wasn’t prepared to make such a permanent decision with my money, so it was easy to procrastinate. When our son was born, it really hit home that as an “older” mom that I would be in my sixties when he would graduate from college! The thought of being retired and paying for college was a major wakeup call to me. That realization and a routine salary increase was the push I needed to sign up for Deferred Compensation.

Taking the Long View

Initially, I was overly conservative in my investments, treating Deferred Compensation more like a savings account rather than an opportunity to invest in my family’s future. As a result, I was frustrated when I did not see much investment growth. After doing some research to learn more about the average annual earnings of stock funds, I realized a couple of additional percentage points on annual earnings could make a big difference over a 20-year period. When SERS realigned the investment options and closed out the fund I was invested in, I took the opportunity to increase my earnings potential by transferring my funds into a stock index fund. This meant that I was increasing my risk, but I understood that I had to think long term. Even if there would be some down years (and there were), my contributions and investment earnings would continue to grow over the years.

As my $50 contributions started to add up, I took personal pleasure each time my account hit a mile stone, first $1,000, then $10,000, then $100,000!! It became an annual goal of mine to see how much I could grow my investments from year to year. I even created my own spread sheet which I would update every year on New Year’s Day. It was scary to see what happened to my account when the Tech Bubble burst in 2001 and just plain grim when the Stock Market imploded in 2008, but I just kept telling myself and my husband that we’re in for the long haul. Every time I saw our investments slide, I would watch them closely as they gained back the ground they had lost.

Staying the Course

When I retired, I chose to leave my funds in Deferred Compensation rather than setting up a monthly withdrawal or transferring them to a private fund. My husband and I had decided to use Deferred Compensation investments as a financial cushion rather than a source of monthly income and I liked the fact that the administrative cost of managing the funds was much less than a what a private fund manager would charge. Last year it felt pretty good to use some of our funds to help buy our new house. Eventually, we will begin to draw down the funds on a monthly basis as part of the federally mandated age 72 Required Minimum Distribution.

Meanwhile, my investments continue to grow – even though as a retiree, I can no longer make contributions. And I still update my spreadsheet every New Year’s Day!



Mary Soderberg is a member of the SERS board; she retired from the budget office in 2011 after 24 years of state service. As a retiree, Mary is an active volunteer and loves to travel.

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